So my wife likes to Get Things Done. Not the David Allen way, but she does not sit around to do anything.
I’m sure there’s a few funny stories in there somewhere, but that will have to wait.
For now, this is a story of our 2012 taxes.
About November of 2015, we got a letter from the IRS stating that we owed them somewhere around $2500, and it listed various things.
Most of it was $20 in this category, $30 in that, etc.
But there was one area that was huge.
It was the Social Security Tax Withholding line with a whopping $2300 (or so).
So this needed some sleuthing. And sleuth I did.
Fortunately we used Turbo Tax online, and they happened to keep all of our past records in the cloud.
So I opened up that years taxes.
I went through everything numerous times, but wasn’t able to find what the issue was.
So then I googled something. I don’t recall what it was off the top of my head, but it had something to do with how that tax / withholding was calculated.
It brought me to one of the lines in the W2.
These looked like the right numbers that we had, so what could it be?
Well, somehow I stumbled across what Social Security Number was being used for the entry.
And that’s where it was.
The SSN was the same in for both hers and mine.
The tax software looking at this, said “You paid too much in Social Security… Congratulations, you get a refund…”
Awesome, right? Maybe at the time, but it came back to bite us in the ass. Hard.
And now for the backstory of how it happened.
Since she likes to do things right away, it was her goal to maximize our deductions on our tax returns.
So, she first looked to see what it would look like if we filed Married Joint.
Then she looked to see what it would look like to file Married Separate.
Turns out, Married Joint was the best way to go.
Unfortunately, she didn’t change the SSN for one of us. And by the way, if anyone is reading this from Turbo Tax, please make this a little more apparent in future softwares, yes?
Anyway, we get our refund, and we go about life for the next couple of years.
Fast forward to 11/2015.
We have a choice. Write them a check for the full amount, or write a check and submit for a payment plan.
The plan was to write them a check for $100/month until we could pay them off.
Fortunately, we could afford $200/month without flinching.
For the next 4 months, I got the bill, and wrote a check for $200.
By the 5th month, I started to notice that the principle was still well above $2000.
A further look made me realize that that $140 of the $200 was going towards the 3% post-dated back interest, which left $60 going towards principle.
No Way, Jose!
Not in my house!
If we were to keep up that pace, we’d be paying off the IRS for years… YEARS!!! (I don’t have the exact calculation mapped out, but 2500/60 is a ways to go…)
So, we scraped together everything, suffered through some beans and rice, and wrote them a check for the payoff amount the following month.
If you’ve never believed Proverbs 22:7 that the borrower is slave to the lender, you’ve never closely looked at your credit card statements enough to see what your future would be full of if you made minimum payments (which are usually just enough to cover the interest plus a little bit of principle).
I was quite nervous for the next few weeks as I waited for the check to clear.
And was also nervous that enough interest had accrued that we’d still owe something, even if it was $20.
But nothing came in the mail.
Black Suburbans didn’t show up to my house to congratulate us for paying off the bills.
Nope. Just an overwhelming feeling of relief.
As Dave Ramsey put it, I gave that bill an eviction notice, and they are gone, and I’m happy that they’re gone.
And they aren’t welcome here for thanksgiving dinner.